tv [untitled] June 26, 2012 5:30pm-6:00pm PDT
>> welcome, thank you. >> good afternoon, commissioners. supervisor kim and supervisor olague will be using this in their districts. we recognize and support small businesses and see small- business as being a driving force and the economy. that is one reason why it supervisor avalos and all the other authors are able to generate less revenue from small
businesses. the fees are less under supervisor avalos than the mayor's. the difference is that john -- or supervisor avalos has targeted large businesses. we did some joint polling. we found this was far more popular with the voters, because it takes less from small business in taxes. the company's that can afford to pay more to ensure the services that need, the infrastructure we need are taken care of. to answer your question, i would
just say to you over 250 rec directors have been laid off. that has had a huge impact on the park's. rec centers have had to close on weekends. 250 directors. that is a lot. obviously in the nonprofit sector, they have not had a raise in five years. they are really struggling. there are good policy reasons across the board to support supervisor avalos's measure. i'm saying i think there are good policy reasons for supervisor avalos's measure.
thank you very much. >> thank you very much. next speaker please. >> hello. i am michele mendez. -- menendez. one thing i never hear about and deal with on a day-to-day basis is the enforcement. it makes a difference for a lot of businesses. my experience is a lot of businesses that come and do there business here and consider the minimum wage laws, the payroll tax ordinance, and the sixth -- the sick bay ordinance. if we want to increase revenue
-- the need to be addressed. bair currently not registered. secondly, there is the exemption. we have a housing issue because of all the high-tech moving in. i see companies that are exempt from it, but they are adding to our housing problem. they should be contributing to this, and maybe not be exempt. that's all i have to say. thank you. >> thank you very much. next speaker, please. >> good afternoon, commissioners. jim lazarus. we were very pleased to have participated for months and this process with the mayor and supervisor chiu's office and the
controller. the city attorney is going to have to go back and start redrafting again by the middle of july when this will have occurred. we believe the tax measures you should support need to be broad- based, fair, and they need to encourage -- continue the exemptions that were in place to drive economic growth in the city and we need to have a reasonable adjustment to a business license fees, which, after all, are a form of tax. which is why in recent years they have not been amendable except by going to the voters. a neighborhood resident of parking sticker will cost you
$100 and a business license fee at the low-end $25 is clearly not cost recovery. there is the business feet side of the equation -- fee side of the occasion. -- of the equation. we have to come up with our revenue neutral measure. it is not revenue neutral for everyone. there is going to be twice as many taxpayers. some will pay more. some will pay much more because there's nothing under the old system. you could have $250,000 and pay no payroll today and she will be paying something under the new
system. so, we need to balance the rate structure. we need to balance the business license fee structure as well. we're looking forward to working with the supervisors on a package that is fair, as i said, equitable, broad-based, and brings the city some new revenue necessary for economic development of the mayor's office. it should have a dedicated revenue source. from the business community to ensure we have a viable and active group in san francisco. this would be a way to help find that as well. a look forward to working with this commission over the next couple of weeks and come up with a package that the entire business community can support. thank you. >> thank you. jim, before you sit down -- you
brought up an interesting point. fee versus tax. the fact is the fee is a tax. i think there is a huge marketing issue here, this idea that there is a class of businesses that do not pay a tax. you actually get oa fee. that part is covered and you pay incrementally. i wish there would be disc ussion. this is not about the flat tax. then at some level, you kick
into a progressive tax. once you hit an extra dollar of revenue, it generates new prague -- new profit. if you are operating below the profitability, but does not necessarily generate more profit. so, i think that's been a big misconception, and it's been used to try to derail the progress we're trying to make. if you guys can help us with that, that would be great. >> in fact, that is true in both schedules that have been proposed. and the question is, what should
that increment be at the low end? 2000% increase at the high-end seems a bit much. >> i agree. i think there should be plenty of room for exceptions where this was not to be an opportunistic land grab or revenue grab, if you will. to put the hurt on certain companies. the idea is to keep the revenue neutral and to meet the points you pointed out, making it equitable and addressing -- i mean, it would ability is one of the primary points, and i think it should be. otherwise, people will feel like they're being mistreated in the city. >> i will let you answer the question. unfortunately, and public comment, we are somewhat prohibited in having a back-and- forth dialogue. so, you can ask a clarifying
question. so, i will let you have one more response. we have to make sure that -- >> it just goes to the issue of the equity ability of our system and the fact that the payroll- based system is not the most equitable. it is not based at all on the ability to pay. of gross receipts system at least as some relationship, we hope, as businesses get greater, that there is some profit in that increase gross. there is not always a profit in peril. san francisco has done very well with payroll tax. in the last 10 years, inflation on average has been 2.5% a year. the payroll tax has grown 5% on average, during a time when employment in san francisco fell to 530,000 people working
from 600,000 people. by and large, these are high payroll individuals driving this payroll tax instead upper house -- instead of a higher and unemployment. >> next speaker. any speakers and public comment? seeing none, public comment is closed. commissioners? do you have other questions? questions? comments? on either proposal? >> ok. first of all, i wanted to talk about the difference in the revenue generation. as a business, as a small
business commissioner, i would look at supervisor avalos's revenue generation, but i am very interested to see more allocation of funds that more directly benefit. so, they are paying into this. paying for city infrastructure, roads, trees, street cleaning, public safety, generally just things that would be dedicated to our commercial corridors. i also was very pleased to hear supervisor avalos talk about the possibility of rolling back some of the business fees. i think that would be a way to break some of those moneys.
i know that -- i would like to suggest that increasing the funding for small business, to bring it up to $700,000, because we are just so tight for money bikaner really achieve although -- we can really achieve what we could do for businesses. i would support the mayor's continuation of the tax credits. and then in terms of the exemptions, i support the mayor's fees from $1 million to $25 million. >> ok. commissioner riley: i would like to know -- of course i asked supervisor avalos about the
businesses impacted. but here on this flier it has this number. is that accurate? >> we have between 50 million and 100 million -- >> does that add up to 946? >> yes. >> how to our rates compared to other cities? >> there is not a marginal rate structure in l.a. and oakland's. oakland is a fairly comparable to ours. it is a little difficult to
compare. they're not too dissimilar. the other thing is oakland and l.a. have much smaller small- business exemptions. >> would this make us the most expensive city to do business in? >> given that we have the highest income tax in california and we're moving to a rate structure that is going to be revenue neutral, then i think it would continue to be the same. commissioner riley: we don't want to lose any business. to put the burden on 946 businesses, i don't know what the impact is going to be. would they leave us? >> in our initial findings, it
would nedda's 3000 net new jobs -- net loss 3000 net new jobs. obviously, we're going to reduce that benefit a little bit. we are expecting a under the mayor's proposal -- and it is probably lower under supervisor avalos's. >> i think it is vitally important that both camps find a single place to land before the legislation goes before the voters. the last thing we want is two ballot measures. i hope there is a lot of working to narrow the gap so we have a single piece of legislation and if there is anything we can do
to help with that process, i think we would all be happy to do it. it will be very difficult to support these two things going forward independently. there is a tremendous amount of work that has to go back to all the financial calculations. the sooner we get there, the sooner we can do legislation to fix the situation. and it seems that we have the political will to do it, and so, let's not get hung up on the details and find a place we can both agree on so we can move forward. president adams: any other
commissioners? i agree with commissioner dwight. everyone in san francisco agrees something should be done. i really hope that supervisor avalos and mayor lee and president chiu come together for one ballot measure. so, any other commissioner comments? do we have a motion on either ballot? >> commissioners, do you want to have any discussion? >> i think we should make our main recommendation that the two group's work together to come up with one measure. i think that is our number one
goal. after that, if we want to weigh in on specifics of either side that we liked or with just being part of the final package, i think that's where we should go. commissioner dwight: yes, i just think we could talk about the details all day long. and this is not the body that is not -- that is going to decide those details. i think we should go away, do your thing. and then if in the final manifestation of the legislation there are things that need to be tweaked and major issues, that would be the time to do it. right now, it does not to as much good because we're talking about shifting sand anyway. let's wait until there is a solid foundation.
then we will -- you know, because things are going to move towards the middle, as they normally do. let's find out where that this. >> though i do think both supervisors and the mayor and some of the other supervisors are interested in what the commission thinks about the tax exclusions and credits, in part because one includes it and one does not. so, i do think it would be beneficial for the commission to provide some sort of directive. and then at least in regard to that particular thing, i do think if the commission in terms of the revenue generation is there -- while another is going to be some hashing -- in
terms of the discussion. well i understand your point, and i do see discussion going on, if we don't say much, then what our thoughts are will not be part of the conversation. are considerations will not be part of the conversation. commissioner riley: i agree. i agree with commissioner dwight. we should ask them to come back with an agreeable solution or proposal. those are my thoughts. >> can you repeat that again please? the last two points?
the tax credit exemption? commissioner riley: the tax credit exemption and the $100 million exemption. >> i would regard that as a flat tax. yes, from a global perspective, weighing in on those high level issues is still fun. what the specific dollar amount this -- i agree. i support both of those things as well. though they are getting a tax exemption on these cases, twitter paid a lot of money for some other stuff, ok? for the neighborhood and things around the new venue. its not as though they walked out of the room and were paid money to come to the city. they paid in other ways. i think that is a means the city
has to direct funds to areas that particularly need it. that market section has been blighted for so long. if it twitter is the one to kick start that -- even west field mall has struggled. that was going to turn that area around, and it didn't. as a matter of fact, we're starting to see a lot of turnover. businesses that move and there have been as successful. we have reached critical mass. hopefully, some of the things they're going on in that area and other areas of the city will require special circumstances, the city can decide need particular efforts in those areas. so, i think the twitter -- twitter is used as the stalking horse for talking about
campaigning for or against the exemptions. they can be very beneficial. with that particular one is objectionable or not, that's my own opinion. we do see it having the desired effect in the areas they are being used -- mission bay, for example. i support that as well, maintaining those. that can always be -- subsequent legislation can always take those away and put them back into the structure. >> commissioner dolley? commissioner dooley: i agree with my colleagues. i also support the tax exemption. i would also like to suggest that we put a request in here
that the funding go for the city infrastructure that would t directly benefit the corridors. things like roads, mta, trees, public safety. i think we all support the public trust fund, but at this point, i think there might be room to do a few other things with additional moneys liked supervisor avalos is suggesting that would be very helpful to the business community in the commercial corridors. once again, and the like to formally request that the office of small business be granted $700,000 in our budget to help with the continuing of supporting the many, many small businesses in the city. >> any other comments?
>> i totally support the tax credit exclusion. central market, mission bay -- we are starting to see real changes over there now. real changes. twitter moved in what? last week? i totally, totally support that. biotech, clean tech. san francisco -- i tell people it is like detroit at the turn of the century. what is happening in the future is happening here, and now. we need to keep that going. we need to do everything to keep that going. because all of the all of the businesses around it continue to benefit. you can see it is changing for the better. with that, the under $1 million
exemption, i totally support that. and what commissioner riley said. how would we like to proceed, commissioners? with our recommendations? >> do we need a motion for the fact that we recommended -- we are supportive of these -- >> i would make a motion with the recommendation of what i would like to see out of this. this will be our chance to chime in on what we would like to see. >> i am good at doing multiple revisions. [laughter] >> do you have some paper their tax >> if i could summarize it, i move that we declare our support for the $1 million hur
dle for the -- how do you want to describe it? the business registration fee, up to $1 million, as an exemption from the gross receipts tax. and we support continuation of the exclusions that are currently in place. that we are supportive of incremental tax revenue to support affordable housing. and that we are not only in support, but insistent that there be a meeting of the mines in a set -- and a single piece of legislation the proposed for